| Tuesday, April 28, 1998
For Immediate Release
Catherine Noe 202-358-6018
John Trollinger 410-965-8904
SOCIAL SECURITY BOARD OF TRUSTEES
ANNOUNCE SOCIAL SECURITY SOLVENT UNTIL 2032
Due in large measure to a growing economy, reduced unemployment,
and low inflation, Social Security’s long-range projections have
improved over the past year, the Social Security Board of Trustees
reported today in their 1998 annual report.
Although sustained high economic growth over the past year pushed
back the depletion of the Social Security trust funds assets to
2032 rather than 2029 as forecast in last year’s report, the Trustees
continued to urge timely action to address long-range deficits.
"These outcomes are a direct result of the enactment of the Balanced
Budget Act and the recent strong performance of the economy," Treasury
Secretary Robert E. Rubin said.
"Today’s report confirms that the Social Security long-term financing
problem is one of manageable proportions," Kenneth S. Apfel, Commissioner
of Social Security, said. "Although there is no immediate financial
crisis, the time to act is now in order to prevent a crisis from
President Clinton has called for this year to be a year of national
dialogue and has asked all Americans to get involved. In December,
the President will convene a bipartisan White House Conference on
Social Security and begin bipartisan negotiations with congressional
leaders early next year.
"The President believes that this year of public discussion is
essential to shaping a Social Security program for the future that
provides a foundation of protection for all Americans and inspires
public confidence," Apfel said.
The Trustees reported that income from payroll taxes will become
insufficient to meet all Social Security obligations in 2013, a
year later than forecast in last year’s report. At that time it
will be necessary to begin using interest income to the trust funds.
Beginning in 2021, it will be necessary to redeem trust fund assets
to pay benefits until 2032 when the trust fund reserves will be
exhausted and income going into the trust funds will provide money
to pay only three-fourths of benefits. Over the 75-year long-range
forecast, the Trustees predicted the shortfall to be 2.19 percent
of taxable payroll rather than 2.23 percent as estimated last year.
"The health of both the Social Security and Medicare trust funds
is important for the millions of Americans who depend on these programs
today, and for the millions who will depend on them in the future,"
Secretary Rubin said. "Preserving and modernizing Social Security
and Medicare is not a partisan issue. We will be able to construct
acceptable solutions to the longer-term challenges of both programs
only if we join together and act on a bipartisan basis."
Required by law to report annually to Congress on the current and
future financial condition of the trust funds, the Trustees also
update economic and demographic assumptions reflecting recent experience
of the past year and analysis of past trends. Based on their findings,
the Trustees reported the following:
- About 147 million workers in 1997 worked in jobs covered by
the Social Security program and 44 million people were receiving
benefits each month.
- Income to the combined Old Age, Survivors, and Disability Insurance
trust funds totaled $457.7 billion and outgo totaled $369.1 billion.
- Trust fund reserves amounted to $656 billion at the end of 1997,
and interest income amounted to $43.8 billion in 1997, representing
an effective annual interest rate of 7.5 percent.
- Administrative expenses totaled $3.4 billion, or about 0.9 percent
of benefit payments.
The Board of Trustees is composed of six members: the Secretary
of the Treasury, who serves as the managing trustee; the Secretary
of Labor, the Secretary of Health and Human Services, and the Commissioner
of Social Security. Two other members, Stephen G. Kellison and Marilyn
Moon, who were appointed by the President and confirmed by the Senate,
are serving four-year terms as public members.
Note: copies of most SSA press releases, as well as other Social
Security information and statistics, are available at SSA’s Internet
site, Social Security Online, at http://www.ssa.gov